Drivers to Save £35/Year as Whiplash Reforms Come into Effect

Drivers across England and Wales are set to save up to £35 per year on insurance costs after small claims reforms were rolled out this week, taking aim at fraudulent injury claims.

The so-called 'whiplash reforms', which took effect yesterday, target false and 'embellished' insurance claims by requiring motorists to provide medical evidence of their injuries before starting a claim.

The reforms also raised the upper limit for small claims from £1000 to £5000, meaning that the majority of claims can now be dealt with out of the courts and without the need for legal representation.

According to the government, the new system will help to standardise claims and deter fraudsters by "ensuring costs are controlled, and that compensation is proportionate to the injury suffered".

Under the new rules, an Online Portal for small claims has been set up, through which drivers can register their claims without the help of lawyers.

Despite a year-on-year fall in the number of road traffic collisions since 2013, the number of claims for road traffic accidents is up by more than 40% since 2006.

In 2019/2020, UK insurers received more than 550,000 claims for soft tissue injuries.

The government claims the tidal swell of claims is padded by a large number of disproportionate and outright fraudulent claims by drivers looking for an 'easy payday'.

Lord Chancellor Robert Buckland said:

Our changes, which come into force today, will put an end to this greedy opportunism and ultimately see savings put back into the pockets of the country's drivers.

Before the shake-up, no medical evidence was required to launch an injury claim, which would be heard at court.

If a claim was successful, the defendant's insurer was liable to pay claimants' legal costs- worth a collective £1.2 billion every year.

Under the new system, drivers making a claim will not need to hire legal representation to use the small claims Portal, provided their total payout for injury is worth less than £5000.

Although it is no longer necessary, motorists still have the option to enlist legal help- but they will be required to pay for these costs even if the claim is successful because legal expenses will no longer be recoverable from the defendants' insurance.

In a statement from the government, insurers pledged to pass on the savings to motorists via premiums savings.

Steve Gooding, director of the RAC Foundation, said:

There are almost as many lurid headlines about whiplash claims as there are claims themselves.

This new system should mean legitimate cases are easier and quicker to deal with, fraudulent claims are more likely to fail, and all drivers benefit from decreases in their insurance premiums.